Colorado Childcare Credit

A couple of years ago, we were engaged by the Salvation Army for their auction and special appeal. Several weeks before the event, they informed me that they wanted to take advantage of the Colorado Child Care Tax Credit program during the special appeal.

They connected me with one of their board members, Mark Smith, a certified public accountant, of M J Smith and Associates who shared a great video that explained the program in detail. WOW, the video and tax credit program sounded so powerful because it funded the nonprofit at 100%, and gave the donors upwards of an 85%* overall tax benefit. Check out the chart below for some examples of the savings that donors can realize:

*The Colorado Child Care Tax Credit program offers a 50% credit to donors for qualified contributions, and depending on their individual tax bracket, donors can realize even more savings. The above chart illustrates a donor’s total tax savings based on a 30% tax bracket (30% Federal, 5% State), calculated by M. J. Smith and Associates.

This was very compelling for the audience and was evidenced during appeal, when asking for support at the $2,500 level, one donor raised his bidder number and said “I’ll do that four times.” That was a $10,000 donation, at the $2,500 level. This excitement and participation allowed us to double the entire goal for the event!

For organizations that do not qualify for the Child Care Tax Contribution, they may qualify for the Enterprise Zone Tax Credit at 25%, or there may be other credits offered by the State, that their donors could take advantage of . . . either way, if the nonprofit can make it easy and compelling for donors to give at higher levels, the nonprofits and donors win BIG!

Clearly, we are not CPA’s or tax professionals, so please check with your tax people to find our what your opportunity is . . .